Margin calculation examples
Example 1: Buying a rolling spot FX product
In this example we assume your account type is Trade.MT4, its deposit currency is USD, and you have submitted the high leverage risk acknowledgment declaration, and therefore you are eligible to trade FX instruments with leverage up to 1:100. Leverage on major Forex instruments is provided as per the table below and is calculated as follows:
| Notional Position Value, USD | Leverage Rate |
|---|---|
| Up to 10,000,000 | 1:100 or 1:30 |
| 10,000,000 — 12,500,000 | 1:50 or 1:30 |
| Over 12,500,000 | 1:10 |
Let`s open a position: Buy 2 lots EURUSD at 1.04440.
The notional position value in the account`s currency (USD) is 2 lots x 100,000 x 1.0444 = 208,880 USD, which is less than the first tier of 10,000,000 USD.
Therefore, a leverage of 1:100 is applied to this position and the margin requirements are calculated as 208,880 / 100 = 2,088.80 USD.
Example 2: Buying a cash index CFD product
Assuming your account type is Trade.MT4 and its deposit currency is USD, the leverage on cash index CFDs is provided as per table below and calculated as follows:
| Notional Position Value, USD | Leverage Rate |
|---|---|
| Up to 500,000 | 1:500 |
| 500,000 — 3,500,000 | 1:200 |
| 3,500,000 — 4,700,000 | 1:50 |
| Over 4,700,000 | 1:10 |
Let`s open a position: Buy 100 lots on [GERMANY40] at 11,467.88 while the EURUSD rate in MetaTrader 4 is 1.04440.
[GERMANY40] is quoted in EUR, so the notional position value in the account`s currency (USD) is 100 lots x 11,467.88 x 1.04440 = 1,197,705.39 USD.
The above value is more than the first tier of 500,000 USD, but less than the second tier of 3,500,000 USD.
Therefore, a leverage of 1:500 is applied to the first 500,000 USD of this position and a leverage of 1:200 is applied to the remainder. So, the margin requirements are calculated as 500,000 / 500 + 697,705.39 / 200 = 4,488.53 USD.
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